I provide independent research of technology companies and was previously one of two analysts that determined the technology holdings for Atlantic Trust (Invesco's high net worth group), a firm with $15 billion under management. Before joining Atlantic Trust I was the Internet Security Software analyst for Smith Barney (where I authored the most comprehensive industry report “Internet Security Software: The Ultimate Internet Infrastructure”) and an Enterprise Server Hardware analyst at Salomon Brothers. Prior to becoming an equity analyst, I spent 16 years at IBM in a variety of sales and manufacturing positions. I have a B.S. in Industrial Engineering from Stanford University and a Postgraduate Diploma in Economics from the University of Sussex, England.

Amazon and eBay Enjoyed Strong "Same Store Sales" Growth in December

comScore estimates that retail e-commerce spending during the holidays was $42.3 billion, an increase of 14% from the prior year. Growth rates which ranged from 15% to 17% for the first four weeks of November eased to 9% to 12% rates for the first three weeks of December before climbing 53% for the week ending December 23.

Note that the Street is projecting Amazon’s revenue to increase to $22.24 billion in the December quarter for 28% year over year growth and for eBay to generate $3.97 billion in revenue, a 17% year over year growth rate.

Amazon: Growth slowed from 42% in October and 43.7% in November to 29.8% in December. Given that e-commerce is growing at 14% Amazon is still increasing its share.

eBay: Growth was about 27% in both October and November but slowed to 22.2% in December. Below are details on fixed-price, auctions and parts and accessories.

Comparison Shopping (CSE): Surged to 15.5% growth vs. the negative growth rates in the first ten months of 2011. Google Shopping drove the gains because the program was hitting on all cylinders: Google was showing GS for a lot of queries, retailers were both engaged and bidding and consumers were responding well to the ads (to the detriment of traditional search).

Search: Search was down 18% as it continued to suffer from Google Shopping / PLA click cannibalization.

Source: Channel Advisors

eBay’s December 22.2% SSS growth was in-line with last year’s 22.1% growth rate, which was actually pretty good and indicates that eBay’s November performance wasn’t just a pull forward of December.

To understand some of eBay’s internal dynamics here are three datapoints.

eBay Auctions: Are on a continuous downward trend and decreased 19% year over year.

eBay Fixed-price: Were up 29.7% year over year vs. 38.5% in November and were the main driver for the company’s lower growth rate in the month of December.

eBay Motor (parts and accessories): Were up 24.2% which was one of the lowest growth rates for the year. This is typical seasonality especially as winter weather hits.

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